An Interview With Rich Lyons, Dean of the Haas School of Business

We talked about changes at the business school level. But what do you think are the most important things that today’s MBA students need to learn?

Every business school is going to answer this a little differently. And I think that’s fine, because there is no one way to think about this.

Setting a direction for an organization often means starting with the future and working backward. So the way I easily talk about this is I say, ‘Look, my kids are ten and seven, and my wife and I think about our kids differently than how our parents looked at us.’ This notion that certain commercial paths are no longer viable or sustainable is, in many ways, defining our time. Our parents had a worldview that we had an inexhaustible world, an inexhaustible set of opportunities. Today when you look at the model of society and modern economics—things like health care expenditure or energy use or the economics of aging, or access to safe water around the world, or carbon, or public education. The list goes on and on. Many of those areas in the last 20 to 30 years cannot sustainably be extrapolated in a linear way. So that’s a huge opportunity.

I’m not going to be around in 2080 but my kids are, so these unsustainable paths need to get bent between now and 2080. I think the business sector will play the lead role in bending the paths, and getting the right public policy and the right nonprofit elements to this larger picture are also going to be essential. So how do we make sure we have the right human capital in the system to bend those pathways?

To get more tangible, what’s the competency model? At Haas, we want to tether our vision around sustainability because it feels like a defining feature of our time. It is a sufficiently long cycle that we can think about human capital in 10-, 20-, 30-year horizons. And then we ask, what is the task of an innovative leader—what does she or he do?

There are ten items on our capabilities list. Everything on this list needs to meet two criteria. One, recruiters have to say, ‘That’s what I’m looking for. That’s what I interviewed for.’ Two, everything on this list has to be grounded in the social sciences. If our faculty heard some of the items on the list and said, ‘That’s right out of the top ten best-seller lists in that new faddish book,’ then they would spit the idea out. And they should spit it out. So we needed to make sure we could deliver a list of capabilities with some intellectual heft and some foundation.

I won’t go through all ten but let me give you some examples. Here’s one: problem framing.

Business leaders and CEOs say to me, ‘Rich, we will always be problem solvers, that’s a given. We will always need problem solvers. But you know what I am not getting enough of? I don’t have enough people who are willing to lift their heads up from a transactional mode and seek more deeply upstream in the problem finding and problem framing stages. I don’t have people who feel comfortable disengaging for two hours and writing down one, two, or three sentences that define exactly what the problem is. And if they can’t do that, then they are going to be wasting a lot of time trying to address the wrong problems.’

The second one is experimentation. We had a talk by Google here at Berkeley Haas recently about innovating at scale. Google has 30,000 employees now, and the question is, how do you keep innovating at a large organization? If I had to summarize that whole talk in a single sentence or question, it would be this: What would your business look like if the cost of experimentation went to zero? How might we do distribution, or how might we do brand management, or how might we do an organizational restructuring? That will require people to ask not how competent do I feel in this decision, but rather, what data would I like to have to make it, and what experiments can I design to get those data?